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GBP/USD: technical analysis 06.01.20

Current trend

GBP/USD is in the stage of upward correction after falling to the level of 1.30528, but the general downward trend is still maintained. The breakdown and pair’s sustained trading below the 1.30528 level will be a signal for downward trend resumption and let the price fall to the area of 1.30310-1.30005.

Alternative scenario

If the "bulls" manage to raise the rate above the level of 1.30983, the correction can continue to the area of 1.31226-1.31400 resistance. The higher line of this channel is coincided with the middle line of Bollinger Bands and can activate a downward rebound. However, the decisive break of 1.31400 is needed to indicate the upward trend resumption. In this case, the next targets of buyers will be the level of 1.31836 resistance.

Technical indicators

Technical indicators mostly keep a sell signal, but the upward correction is possible in the short term.

Bollinger Bands are diverging on the background of bearish momentum.

MACD is growing in the negative zone.

Stochastic has left the oversold area and is pointed upwards, reflecting the high possibility of upward movement formation.

Support and resistance

Support levels: 1.30528, 1.30310, 1.30005.
Resistance levels: 1.30983, 1.31226, 1.31400, 1.31836.

Trading recommendations

Short positions can be opened below the level of 1.30528 with the target at around 1.30310 and stop-loss at 1.30600.
Long positions can be opened above the level of 1.30983 with the target at around 1.31226 and stop-loss at 1.30902.

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